The rate of CGT that applies to Business Asset Disposal Relief on the lifetime allowance of £1Million is currently 14% until 5 April 2026. After this date it will rise to 18%.
The above could be a significant tax saving for you or your clients and, if this is being considered, the time to start acting and planning is now.
Should you wish to discuss a Members’ Voluntary Liquidation further then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk.
In business, companies will enter into contracts or trade agreements with suppliers and customers by a matter of choice. However, H M Revenue & Customs (“HMRC”) have no choice. They are an involuntary creditor who must engage in tax compliance relationships.
The current business climate indicates cash flow remains one of the main threats to company survival and, at PBC, we hear claims that because HMRC are not providing that urgent supply or service required, payment of the taxes is not given any priority. Given that HMRC have more (and expedient) powers of enforcement and recovery than most suppliers, this is wrong.
In two recent reported cases, HMRC:
Continued with their petition, notwithstanding the company in question had already entered into voluntary liquidation. The company was wound up by the court on the basis intense investigations were needed surrounding tax evasion and, in the interests of creditors as a whole the compulsory liquidation was more justified than a voluntary liquidation.
Exercised their powers to have a company wound up in the public interest. This was a company that promoted debt avoidance schemes and the court agreed the operation was detrimental to the taxpayer and the winding up made.
Certainly, at PBC we have noticed a significant uplift in enforcement activity by HMRC and PBC are administering the liquidations of several where there has been tax avoidance or evasion. These cases can lead to personal liability against directors.
HMRC officers are currently more proactive, seeking to attach HMRC debt to company assets, which could ultimately result in that company being so disabled, it is forced to cease trading. Generally, HMRC will give you a lot of warnings but, all too often, these warnings are ignored until that warning becomes an enforcement action.
As mentioned, HMRC are not “Trading” with a company. They do not have that trading relationship but they do have a duty to maximise tax receipts. Ignoring their threats is misconceived because HMRC will carry out those recovery threats if needed. However, we find they are willing to being open and candid in a continuous dialogue with them which can often result in a manageable way forward.
If you are struggling with tax liabilities and need any advice or assistance, or on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.
When a company or an individual is experiencing financial difficulties, it is vitally important that early advice is sought from trusted advisors which, generally, improves the potential outcome for all concerned. At PBC Business Recovery & Insolvency this is something we advocate all the time and below is a recent testimonial from a director where he has taken advice sooner rather than later….
“I have been meaning to drop you a line since we met up to say many thanks for your time and sage advice regarding my options to keep cashflow running and stave off the need to investigate any other more drastic solutions at this stage. I have managed to put a payment plan in place for the VAT as suggested, alongside the corporation tax plan already in place, so this has enabled me to cover the redundancy costs for a couple of positions, with the ongoing savings that this will provide hopefully being sufficient to see us through to a more buoyant trading environment. As you said when we met, hopefully this will mean we don’t need to meet again any time soon in a professional capacity (in the nicest possible way!) but I will certainly let you know how we get on at the other side of all this in any event. Have a good weekend and thanks once again”
If you need any advice or assistance with any financial concerns, PBC are here to help and the sooner advice is sought the more options that are available, which can include no formal instruction to us. Please contact us on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.
PBC Business Recovery & Insolvency are dealing with the Administration of the UK subsidiary of a very well-known coach company that was based in Belgium. Apart from the usual office furniture and equipment, together with plant and machinery, the company owned its freehold trade premises.
The chattels all sold for the higher end of valuations, but the highlight was the premises. Agents had valued the premises with instructions to give serious consideration to offers in excess of the minimum expectation. As a result of a short marketing campaign, the agents received several offers but rather than simply accept the highest offer, the interested parties were placed on notice to submit their best and final bid. The result was the property was sold for nearly twice as much as expected. This will mean a return will be paid to unsecured creditors, more than double what was originally envisaged.
You cannot substitute experience, and the outcome of this property sale was the result of the vast experience at PBC, working alongside Wilson Browne Solicitors and Lambert Smith Hampton, who should be recognised for their part in this success.
If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.
“My company is failing but there remains a viable core business that I want to save.” At PBC we are hearing this scenario on an increasingly regular basis
There are recovery options available to companies that are suffering from cashflow difficulties, such as a company voluntary arrangement. Unfortunately, circumstances may dictate the only viable option is to acquire the business from the company and start afresh. The most regularly used procedures for this are a pre-pack administration or simply acquiring the business from the appointed liquidator. However, the overall circumstances dictate which is the more appropriate option in the circumstances.
A difficulty with looking to re-start trading with a new company can be the name and/or brand. Section 216 Insolvency Act 1986 (“The Act”) states that the name of a company that is in an insolvent liquidation becomes a prohibited name. Directors have suggested looking at a pre-pack administration avoids this restriction. However, it is often the case an administration will exit into liquidation and accordingly, trigger Section 216 of the Act.
The provision relates to a name that is so similar that it may cause confusion to the public. It also includes a trading name or a simple use of initials. In the case of Re: Johnsons Electrical & Mechanical Services Limited (in liquidation) the court determined naming the acquiring company, “JEM (Group) Limited” was the re-use of a prohibited name, despite the director claiming “JEM” was part of his name – Jeremy.
There are exceptional rules to argue against the allegations of a breach to this provision and a director should always seek independent legal advice on the re-use of a prohibited name. More importantly, directors should ensure the steps required are strictly followed because the courts adopt a no tolerance stance towards the failure to follow correct procedures. As a warning, the penalty for getting this wrong has been demonstrated in the Johnson case where the director was held personally liable for the debts owed to the (2) claimant companies, resulting in his personal bankruptcy.
If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.
Many readers may take some pleasure at reading the headline, which relates to an Australian Insolvency Practitioner (“IP”) who was found guilty of extracting over AUS$2.5 million from insolvency estates.
Whilst that IP will have plenty of time to reflect on his wrongdoing, the estates should not lose out as a regulated IP must take out a specific insurance bond, to the value of the anticipated assets in that estate, on every appointment. This serves to protect the creditors from any financial wrongdoing by the IP or their staff.
Unfortunately, there are unregulated advisors who prey on the vulnerable making big assurances such “Use us and we help all of your financial worries go away”. They will offer you something like:
You can resign as a director.
We shall acquire the shares.
Everything will be sorted, meaning you can get on with your life.
PBC have previously advised directors of the dangers of trying to “Cut corners” and use an unregulated advisor, yet those warnings do occasionally go unheeded at considerable personal risk to the directors.
On 29 July 2024 Save Consultants Limited was subject to a public interest winding up order. This company worked alongside Davis Acquisitions Limited who were appointed as director of 78 companies. The Insolvency Service stated Davis Acquisitions was used as the vehicle to, “Avoid formal insolvency procedures, asset recovery and director conduct scrutiny.”
Unlike the situation with the wayward Australian IP, these companies are not subject to the specific insurance requirements and, as such, the creditors will suffer greater loss. However, the likely issue surrounding those 78 companies will be a formal winding up of each company, followed by commencement of legal proceedings for a breach of duties, which could lead to personal liability and even director disqualification for those directors who believed using an unregulated advisor was the “Easy” way to out.
Financial difficulties can often be an unpleasant and stressful experience for anyone, so it can be attractive to hear someone promising to take all of your problems away. However, as the saying goes, “If it sounds too good to be true then it often is,” could not be closer to the truth when discussing the highly specialised area of insolvency, where, to avoid any repercussions, demands appropriate and regulated specialist advice.
If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.
Are you looking to retire, close your company down and extract the surplus funds as a dividend against your shares? This is where tax planning and a formal winding up of the business affairs via a members voluntary liquidation (“MVL”) come into the equation.
A MVL is a solvent winding up that, given certain criteria, enables the shareholders to claim business asset disposable relief and reduce the capital gains tax to (currently) 14%. This is to increase to 18% in April 2026. However, there is some uncertainty whether the available capital gains tax rates will remain, given the Autumn statement will be on 26 November 2025 and representations being made by the Government with regards to taxation generally.
Arguably the most fundamental part of a MVL is swearing the declaration of solvency. This includes a statement from the directors whereby they declare all known company creditors shall be paid in full, together with statutory interest within a period not exceeding 12 months.
Where properly pre-planned, by the time you are ready to commence the MVL procedures, all liabilities have already been paid and it is a “Clean” state of affairs, requiring the distribution to shareholders. However, what if you have a potential debt hanging over the company? It is a liability the directors say is not owing, yet it could end up being a court matter and is likely to remain unresolved within the 12-month period. What do you do?
Ordinarily, it would be reasonable to suggest a provision is made against that prospective liability so, if the company lose the argument or reach a settlement, the funds are there to cover the liability. However, the recent High Court decision of Noal SCSP & Ors v Novalpina Capital LLP & Ors [2025] EWHC 1392 suggests if all debts are not paid within the specified 12 months the liquidator should be looking to convert the MVL into an insolvent liquidation. That gives rise to investigations, including whether it was reasonable to swear the declaration of solvency in the first place.
The above decision is subject to appeal, but the key message, here, is plan thoroughly and consider all possible issues before commencing the MVL itself. This is where PBC can assist you when approached at an early stage.
If you need any advice or assistance on any MVL, corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.
Being a director of a limited company means a director is not liable for the company debt. Well, that is the theory anyway.
All too often at PBC we advise directors who have given personal guarantees for company liabilities (“PG”). Sometimes they do not realise what they have done until after we have suggested they check out the documentation, while on other occasions a PG has been given when their company was under duress and the directors were desperate for financial support.
Having said this, the key question is whether that PG is enforceable or even a PG at all; just signing a credit agreement on behalf of your company does not mean you have given a PG.
The best advice that can be given is, when confronted by a request for a PG, a director takes independent legal advice beforehand. It maybe the directors have no choice but to give a PG, but there are areas of mitigation, such as a cap on liability, for example.
The presence of a PG may, at times, influence directors to act contrary to their duty owed to company creditors when insolvency is a significant possibility, as the fear of the PG being called against them is a genuine concern.
At PBC we see this conflict between PG exposure and directors duties regularly and advise directors on the correct way forward, including where possible facilitating a means of settling the PG exposure if, indeed, the worst were to happen.
If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.
Everyone wants a pop at someone and that someone ends up being us at times.
Landlords losing a tenant or with rent arrears
Creditors being owed money
Director/shareholder disputes
Employees losing their jobs
We’ve had creditors turn up with big burly men and threatening behaviour, verbal and written insults. Every man and his dog thinks that because a company has gone bust there must have been some wrong-doing which we absolutely must investigate. Albeit that is very rarely the case, in the few instances we do have to take legal action and lift the corporate veil, we then hear ‘you didn’t tell us that’ or something else, quite often insulting the person having given the advice.
If we know about it, we will tell you if it’s right or wrong. Even if there is an action, we report it to the Insolvency Service, but it rarely results in director disqualification. We can only pursue someone financially if they have anything to pursue and if it’s cost effective. However, if we don’t do so, that’s our fault too, even though we are an independent 3rd party who was not involved whatsoever in running that business. Often, we are accused of being in cahoots with the directors, just because they came to us for advice and we are helping them with their statutory duties, along with relieving them of some pressure at the same time.
We work in a very complex profession whereby the ‘entity’ we are acting for changes throughout, initially advising directors or individuals of their responsibilities and guiding them through the process before being formally appointed and then having a statutory duty to act for the creditors. Despite all of these, we remain in insolvency because we believe there is a value in what we do.
The insolvency process is beneficial although it’s a hard sell at a networking event, we can’t often offer much in return but may help you keep a client, ensure employees get paid, release directors from a lease enabling the premises be let to a more reliable business, put some money back into the public purse, return funds to unsecured creditors in quite a few occasions, relieve some pressure from business owners that simply need guidance so they don’t fall fowl and become one of those few above that do become personally liable.
We often provide enough support that our formal services are not needed.
Who knows – you may actually see the positives in what we can offer…..
By Claire Goodacre
If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.
It has become an increasing situation to discover adverse director loan accounts (”DLA”) showing on the balance sheet of companies that are in financial difficulties. All too often a director is left with a financial burden that requires settlement, whether that is in part or in full, paid by way of lump sum or over a period of time.
Where it is part settlement, is the unpaid balance of that DLA deemed to have been written off or are you simply released from that liability?
That was the question the tribunal judge had to consider in the First Tier Tribunal of The Commissioners for his Majesty’s Revenue and Customs versus Gary Quillan. The issue arose after Mr Quillan paid £57,000 to the liquidator of his company, leaving an unpaid balance of £382,456. HMRC decided to levy a tax charge against Mr Quillan under section 415 Income Tax (Trading and Other Income) Act 2005 that permits the assessment against any adverse DLA which is either written off or released (from being pursued). HMRC lost the appeal as the tribunal determined the DLA balance had not been written off nor released, merely left unpaid and available to pursue should the financial circumstances of Mr Quillan significantly improve at some later time in life, subject to the provisions of the Limitations Act.
Where an adverse DLA is concerned, if a director is incapable of repaying in full, paying a settlement in full and final satisfaction, it may expose that director to a section 415 tax assessment. But, in leaving the matter “Open” the risk carried is they could be subsequently pursued for the unpaid element at some later stage, presumably within the 6 years limitation period?
When faced with a company that has an adverse DLA, PBC look to work with the director to review the construction of the DLA to ensure the balance is a genuine personal liability. All too often we find the DLA includes genuine business expenses and often makes no allowance for setting off monies owed to that director. Indeed, in a recent instruction, PBC were able to successfully defeat a DLA recovery claim by litigation funders (acting for a liquidator) by exercising a similar review. Unlike that recent instruction, while a review may not extinguish the balance owed, it can often assist the director in reaching an agreement for repayment and in a manner that could minimise the threat of a tax assessment landing on the doorstep at a later date.
If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.
